Department of Civil Service

New York State Health Insurance Program: Overpayments for Services Provided by Long Island Digestive Disease Consultants

In the New York State Health Insurance Program, the Department of Civil Service administers health insurance programs for active and retired State, local government and school district employees and their dependents. The primary such program is the Empire Plan, which provides services costing more than $5 billion a year.

The Long Island Digestive Disease Consultants (LIDDC) is a medical practice located in East Setauket, New York. LIDDC does not fully participate in the Empire Plan. Accordingly, if an Empire Plan member is treated by LIDDC, the Empire Plan may not reimburse LIDDC for its full charges. Rather, it may only reimburse a portion of these charges (generally 80 percent), with the member paying the balance. However, we found that LIDDC was routinely waiving Empire Plan members’ out-of-pocket expenses. Such a practice may constitute billing fraud, as the Empire Plan was reimbursing 80 percent of what it understood to be LIDDC’s actual charges. We recommended the Empire Plan recover the inflated portion of LIDDC’s bills, an amount we calculated to be $542,317 for the five-year period we audited (about 7 percent of the total $7.6 million that LIDDC billed to Empire Plan members during this period).